Fundamental Project Management. Fundamentals of Procurement Decisions

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1 Fundamental Project Management Fundamentals of Procurement Decisions

2 Moderator Janelle Abaoag Project Insight Marketing, Public Relations

3 Things to know All participants will be on mute Questions are welcome Please use the questions box to ask questions The moderator will select questions All questions will be answered today or by at Webinar recording available in the PI Community

4 Presenter Diane C. Altwies, MBA, PMP CEO, Core Performance Concepts Inc. Training in project management, PMP and CAPM certification, leadership, business analysis, agile and six sigma PMP and CAPM are registered trademarks of the Project Management Institute

5 Presenter Janice Y. Preston, MBA, CPA, PMP COO, Core Performance Concepts Inc. Training in project management, PMP and CAPM certification, leadership, business analysis, agile and six sigma PMP and CAPM are registered trademarks of the Project Management Institute

6 Who Is on the Call? Are you: A Project Manager without your PMP certification? A PMP in the role of a Project Manager? A program manager? Just looking for ways to use Project Insight more effectively?

7 Goals of the Fundamentals Series Deepen your understanding of fundamental project management concepts Identify tools and techniques that can be implemented to manage projects more effectively Discover practical applications for your existing projects Use project management software more effectively

8 Objectives of this webinar At the end of this webinar, you will be able to: Define procurement alternatives Identify influences on the make vs. buy decision Develop selection criteria Compare and evaluate the what if scenarios using Project Insight

9 The PMBOK Guide Nine Knowledge Areas Integration Scope Time Cost Quality Human Resources Communications Risk Procurement

10 Project Procurement Management Processes Planning Processes Executing Processes Monitoring & Controlling Processes Closing Processes Plan Procurements Conduct Procurements Administer Procurements Close Procurements Procurement Statement of Work Contract Award Various Procurement Documents Closed Procurements Procurement Documents Source Selection Criteria Deliverable Acceptance

11 Procurement Management Overview Purpose of procurement management To acquire products, services or results needed from outside the project team Differences from other PMBOK Guide Knowledge Areas All projects may use the Plan Procurements process Only those projects that require Procurements will use the 3 other processes of Conduct, Administer & Close procurements Takes place during all process groups except Initiating

12 Procurement Alternatives Procure all goods/services from multiple sources Procure all goods/services from a single source Procure only a small portion of goods/services Procure none of the goods/services Lease or rent

13 Make vs. Buy Analysis Time Resource requirements Degree of control desired Proprietary design Type of requirement Cost Supplier expertise Small volume Limited capacity Complexity of requirement

14 Question for You What other factors might affect the make vs. buy decision?

15 Other Make vs. Buy Factors Risk associated with the contract Extent of price competition Integration of operations Clarity of Statement of Work Poor supplier experiences Degree of customization Stabilization of workforce Available industry standards Idle existing capacity Frequency of expected changes Need to augment labor force Maintain multiple sources Acceptance of indirect control

16 Busy Foods Inc. Our Case Study Customer Needs Busy Foods, Inc. Organizational Needs Project Charter

17 Our Situation BUSY FOODS services over 200 clients world-wide. In recent years, long-term clients have started to leave for a competitor who promises overnight delivery of restaurant equipment without a minimum order. Most of BUSY FOOD S clients are large restaurant venues who can serve thousands in a single day. BUSY FOODS would like to improve their distribution process to match the competition

18 Project Objectives Improve the time from order intake to shipping restaurant equipment from an average of 3 days (24 business hours) to less than 8 hours within 6 months of project implementation. Develop and launch a marketing campaign to existing clients and past clients to educate them on the new restaurant equipment shipping program one month prior to implementing the new process. Train all internal staff affected by the new business process to ensure full adoption within 2 months of project implementation. Full adoption means that all staff have been trained and that a minimum of 10% of restaurant equipment shipments are shipped within the same day.

19 Question for You What types of procurement items might be appropriate for this project?

20 Link to Project Insight Create Marketing Message & Deliver Marketing Messages are the two deliverables being considered for BUY.

21 Determining Budget for Targeted Items

22 Identify Potential Vendors Ask for recommendations Purchasing Department Colleagues Professional organizations Review other marketing campaigns that you like

23 Determine Selection Criteria Selection criteria Time delivery must be within a specific time frame Cost must not exceed 20% of current plan Approach creativity of marketing campaign and ability to convey information

24 Compare Bids Criteria Weighting Factor Rating / Score (1 least preferable 5 most) Vendor A Vendor B Vendor C Time 35% Cost 25% Approach 40% Total 100%

25 Question for You What other criteria do you use that affect the vendor selection?

26 Revise Estimates

27 Sample Question Question You are the project manager for a construction company in Florida. 90 % of the projects your organization manages are government jobs with high visibility within the military ranks. Your organization is growing so fast that you need to contract with other entities for temporary staff. All of the following should be considerations of procuring resources from a staffing Answers A. The home office location of the staffing company B. The hourly cost of the construction workers C. Past experience of the staffing company with other construction firms D. The references of the staffing company for placement of resources with the appropriate skill set company, EXCEPT:

28 Sample Question Question You are the project manager of a business process improvement project for your organization due for completion within 2 months. The project is approximately 30% complete and the organization just downsized its staff, which impacted your project team by 10 people. You are being asked to use an outsourcing company for resource replacements. You should Answers A. Accept the loss in staff and modify the schedule accordingly B. Coordinate a meeting with the outsourcing company immediately to determine resource availability C. Determine the type of resources impacted and the skill sets needed to complete the project on time D. Talk to your manager about subcontracting 3 of the recently laid off workers, since they know the project the best

29 Review Procurement alternatives provide many ways to obtain products and services The make vs. buy decision may have many influences Creating appropriate selection criteria helps you make better choices You can compare and evaluate the what if scenarios using Project Insight Questions & Answers???

30 Goals of the Fundamentals Series Deepen your understanding of fundamental project management concepts Identify tools and techniques that can be implemented to manage projects more effectively Discover practical applications for your existing projects Use project management software more effectively

31 Books for Credentials Achieve PMP Exam Success Achieve CAPM Success Program Management Professional (PgMP ) Study Guide To order:

32 Online Courses for PDUs The ProActive PM Series Practical Tools is now available online! You are invited to learn and earn 24 PDUs with 8 online sessions at your own schedule and pace. Brush up on your knowledge of the fundamentals Find tips and techniques to help you gain control of projects Learn about more complex topics in project management Discover concepts, tools and ways to better manage projects

33 2012 Fundamentals Webinar Series The 2nd Wednesday of Every Month -8:00am PT Topics Jan Scope: Needs, Requirements, Scope, Oh My! (NEW in this series) Feb Time: Estimating Time (NEW!) Mar Cost: Estimating Cost (NEW) April Communication: Avoiding Communication Pitfalls May Quality: Delivering Quality in Projects June HR: Managing Project Conflict (NEW) July Communications: Difficult Conversations Aug Risk: Identifying and Assessing Project Risk Sept Stakeholder Management: A New Focus on Stakeholders (NEW!) Oct Procurement: It s Not Just for the Purchasing Department Nov Integration: Working the Project Flow Dec Integration: Managing the Human Interface

34 Register Ahead of Time Go to 2 ways to register: Free Project Management Training Training & Webinar Calendar

35 Earn PDUs You will automatically receive your PDUs via after the webinar For further questions: Earn 1 PDU for each webinar session attended To register your PDUs go to Login as a member of PMI Select Category B Continuing Education Knowledge Areas:Integration, Cost, Procurement Process Groups: Initiating, Planning Enter the information provided on your proof of attendance Click continue

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